FAQ’s About Obamacare and F1 Visa Students

I hope answer some of frequently asked questions and basic facts about Obamacare and F1 Visa Students, H1B Visa holders in this article.

There’s not a lot of information available about Obamacare and it’s impact on non-immigrants in USA. Non-Immigrants include students in F1 Visa, Tourists (B2 visa) temporary visa workers like H1B, L1, L2, etc.

What is Affordable Care Act?

Affordable Care Act (ACH) is also called Obamacare, which was passed in 2010.

Makes Health Insurance required for most people in USA (Health Insurance Mandate)

Health Insurance is available for everyone

Make insurance more affordable by providing tax credits for those who qualify

Here’s a short video that gives a Bird Eye View about the Affordable Care Act

Summary of changes to health insurance law as shown in the video :

Ends Pre-Existing Condition Exclusions for Children

Keeps Young Adults Covered under parents plan till age of 26

Insurance company cannot cancel your coverage just because you made an honest mistake.

You have the right to ask that your plan reconsider denial of payment.

Lifetime limits on most benefits are banned for all new health insurance plans.

Insurance companies must now publicly justify any unreasonable rate hikes.

Covers Preventive Care at No Cost to You

Choose the primary care doctor you want from your plan’s network.

You can seek emergency care at a hospital outside of your health plan’s network.

If you don’t understand some of the terms described in the video, don’t worry. This guide will explain in plain English about the Health Insurance Basics and new changes in the law.

Off all the benefits listed of Affordable Care Act, 4 points highlighted above should have the most impact to majority of this blog readers ( F1 visa, Tourists visiting USA in B2 Visa, H1B Workers, L1, L2 workers, etc).

What is Health Insurance?

Health Insurance is an agreement between you and your insurance company.

You decided to buy plan from the insurance company for certain terms.

You pay monthly premium (fixed) to buy the insurance coverage

Company will pay for medical expenses based on your terms of health insurance plan

Health Insurance Before Obamacare

Here are some of the problems that existed before Obamacare law

Pre-Existing conditions were not covered. For Example, if you had heart disease and decide to buy insurance, Insurance company could deny your coverage, if you went to hospital for heart problems for initial few months.

There were Life time plan limits on how much plan will pay. If someone has Cancer, it’s going to cost lot of money for the treatment. If your plan had lifetime maximum of $500,000 and if expenses is more than $500,00 then additional expenses will not be covered. Could you afford to pay $200,000 in cash?

With ACA, health insurance company cannot deny coverage for pre-existing conditions or have life time plan limits.

Health Insurance After Obama Care

Obamacare care have fixed such problems with Health Insurance. Refer to the benefits in the above video.

But this new law is going to cost insurance companies lot more money.

To compensate that, Obamacare mandates all qualified people to have health insurance. That includes healthy people.

Now, let’s look into impact of the Obamacare on Non-Immigrants in USA.

Obamacare and F1 Visa

Can Non-Immigrants qualify for buying health insurance in Marketplace?

H-1B, F-1 and J-1 visa holders who are on work visas, student visas and exchange programs who have been in the country for less than five years are eligible to buy insurance through the health care exchange.

I’m in F1 Student visa. Does Health Insurance Mandate Apply for me?

Here’s where it gets tricky and not easy to understand.

Health insurance mandate is controlled by IRS. According to IRS, you must be considered as Resident-Alien for Tax purpose to enforce Health Insurance Mandate. Here’s Q&A page in IRS site which answers the question :

Are all individuals living in the United States subject to the individual shared responsibility provision?

All U.S. citizens are subject to the individual shared responsibility provision as are all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes.

Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a U.S. income tax return.

So, how do you know if you are resident or non-resident alien? You can calculate that based on two tests.

A student is any individual who is temporarily in the United States on an “F, ” “J, ” “M, ” or “Q ” visa for the primary purpose of studying at an academic institution or vocational school, and who substantially complies with the requirements of that visa are exempt from Individual Mandate.

What does that mean?

If you are in F, J, M or Q visa in USA and for first 5 years you are considered to be exempt and you will be considered as non-resident alien.

If there is change of visa status from F1 to H1B, then you are non-exempt.

According to IRS : Individuals in H1B status are never Exempt Individuals

Summary

Individual Mandate doesn’t apply to non-resident aliens even if they file taxes

Resident or Non-Resident Tax status is determined by the green card test or substantial presence test.

F, J, M and Q visas holders are exempt from the substantial presence test for 5 years if there is no change in visa status (like F1 to H1B)

Non-resident aliens in F, J, M and Q visa holders are not subject to the individual health insurance mandate.

Does that mean I don’t have to buy Health Insurance?

No way. I strongly recommend each and every person in USA (visiting, living, studying, etc) to have health insurance coverage.

Health Care costs is very expensive. If you don’t have coverage and happen to have major health issue, then your entire life savings and your parent’s life savings could be wiped out. If you are a student sponsored by parents for education, then make sure you get coverage through your college or buy equally qualified health insurance plan.

P.S. I would really appreciate it if you tweeted out this article Obamacare and F1 Visa article.

P.P.S. You would be doing me a HUGE FAVOR by sharing it via Twitter and Facebook and leaving me a comment to let me know what you think.

What about the F2 visas? Are the eligible for Marketplace(healthcare.gov) plans? And what about the tax credit they may receive to reduce the monthly premiums? Due to that they may be considered exempt from Individual Shared responsibility, so does it mean they can NOT receive the tax credits?Or they still can receive the monthly tax credits( causing their premiums to be reduced significantly).

I’m a student with J1 visa and I’m here with my wife (J2). Recently, we had a baby, who is going to be a US citizen. Can we use Obamacare or a different kind of program to the baby? Unfortunately, I cannot fond any information about it on the web.